4.77M MOONs to Be Burned as the Reddit Community Token Fully Migrates to Arbitrum Nova
Within a week, the MOON community token of the r/CryptoCurrency subreddit appreciated by 31.5%. Much of that spike in value comes from token burning and migration to Arbitrum Nova, an increasingly popular Ethereum scaling network.
Latest MOON Burning Spree
Last week, r/CryptoCurrency announced that roughly 4.7 million MOONs tokens would be burned starting this week. Sending MOONs to an unretrievable address (self-destruct contract) is a leftover phase from MOONs migration to Arbitrum Nova that started half a year ago.
Arbitrum One and Arbitrum Nova scale up Ethereum as layer-2 add-ons by handling transactions with ultra-low gas fees. However, as the next iteration of the Arbitrum network, Arbitrum Nova lowers gas fees even further for larger and more complex transactions, thanks to its AnyTrust technology.
This is why the r/CryptoCurrency subreddit picked Arbitrum Nova as the home for MOON community tokens. With the migration completed, Ethereum’s Rinkeby testnet stash of 4.1 million locked MOONs is set for burning. Those were the tokens that weren’t bridged to Arbitrum Nova.
Additionally, the bridge that migrated MOONs to Arbitrum Nova has been discontinued. Redditors holding MOONs in their Vaults (digital wallets via Reddit’s mobile app) have their tokens on the Arbitrum Nova now, as well as those redditors who used the bridge in the past.
This leaves the total supply of MOONs at 107.89 million, drastically smaller than the original cap of 250 million. Nonetheless, new tokens can be issued up to that cap. On a monthly basis, r/CryptoCurrency moderators receive 10%, while 40% goes to the community pool, and the rest is distributed to active posters.
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MOON Origin and Purpose
In 2020, Reddit, the world’s largest collection of custom forums, launched Reddit Community Points (RCPs). To facilitate a social credit score system, RCPs incentivize users to post quality content. If it is deemed as such by other community members, posters receive RCPs as rewards for their contributions.
These rewards range from special badges and animated gifs to greater voting weight in polls. Of course, given the volume of posts, such ornate posts then stand out, which makes them more likely to receive even more community karma.
And what would r/CryptoCurrency subreddit be without taking it to the next level? Consisting of over 6 million members, the subreddit’s admins launched their custom MOON RCP, as ERC-20 token. This makes it compatible with the entire Ethereum ecosystem.
MOONs distribution depends on users’ weighted karma vs. the monthly distribution of tokens. They can also win MOONs via regular trivia sessions. To gain special membership, posters can burn their MOONs, which further increases the value of each token.
MOON Farming
In addition to earning MOONs the regular route, posters can buy the tokens at Arbitrum Nova’s SushiSwap, ArbSwap, Gate.io, and the Seychelles-based MEXC exchange. Year-to-date, the price of MOONs has increased by +117%, from $0.078 to $0.17. Combined with negligible Arbitrum fees and the burning mechanic, this has increased demand for MOON farming.
MOON farming is exceedingly appealing because one can earn it by effort instead of traditional investing. When the price of MOON tokens was 8 cents, one Redditor calculated that a minimum hourly wage would require 155 MOONs to be equivalent to Australia vs. just 1.25 MOONs in the Gambia.
What About Other Reddit Forums?
While r/CryptoCurrency’s 6.1 million member count is a respectable number, others are even more active. Case in point, AskReddit has 39.7 million members. The massive content volume turns the forum into a chat box, with most new questions failing to appear on the first page.
In these situations, having a token to put visible weight behind a question or a reply would be highly advantageous. Presently, r/CryptoCurrency has the advantage of being crypto-focused, so it attracts like-minded people. But if their tokenization mindset breaks out to Reddit’s ‘mainstream,’ we could see community tokens supplant the value of most meme coins.
At press time, the total market cap of meme tokens is $20.9 billion, led by Dogecoin ($12B) and Shiba Inu ($7.6B). While they owe their market caps to Elon Musk and rampant speculation, it is only a matter of time before the utility of community tokens breaks through as a more consistent value.
Do you think community tokens are limited by the visual throughput capacity of Reddit itself? Let us know in the comments below.
